Filed by Hewlett-Packard Company Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Compaq Computer Corporation
Commission File No.: 1-9026
This filing relates to a planned merger (the "Merger") between Hewlett-Packard
Company ("HP") and Compaq Computer Corporation ("Compaq") pursuant to the terms
of an Agreement and Plan of Reorganization, dated as of September 4, 2001 (the
"Merger Agreement"), by and among HP, Heloise Merger Corporation and Compaq. The
Merger Agreement is on file with the Securities and Exchange Commission as an
exhibit to the Current Report on Form 8-K, as amended, filed by Hewlett-Packard
Company on September 4, 2001, and is incorporated by reference into this filing.
The following is a letter written by Richard A. Hackborn, a member of HP's
board of directors, and Thomas J. Perkins, a member of Compaq's board of
directors. This letter appeared in the December 9, 2001 edition of The
Mercury News, San Jose.
OPINION: EDITORIALS AND COLUMNS
HP-COMPAQ MERGER IS RIGHT CHOICE
DEAL MEETS THE DEMANDS OF RAPID CHANGE
BY RICHARD HACKBORN
AND THOMAS PERKINS
AS "elders" of Silicon Valley -- a rarity in such a young industry -- we can say
with certainty and the benefit of perspective that the information technology
industry has never seen a period of change like the one we are now entering.
Companies disregard this at their peril. That is why we cast our votes in
emphatic favor of the merger of HP and Compaq, two companies whose future
greatness depends on their ability to get ahead of change -- now. We are more
convinced than ever that is the right choice for both companies.
Each of our boards and management teams had independently reached similar
conclusions about the industry and the economic environment. We share a
conviction that advances in technology, increased competition and changing
customer requirements are rapidly transforming the structure and economics of
the information technology industry.
These shifts are placing new demands on us and other companies, particularly as
the customers we serve enter their own period of economic and structural change.
Facing increased competition themselves, our enterprise customers increasingly
want to purchase integrated solutions, not individual products and technologies.
They seek to benefit from the economics and flexibility of standards-based
platforms and architectures. They want stronger partnerships with a smaller
number of global, end-to-end solutions providers.
Individually, our companies have many of the key elements necessary to succeed
in this environment. Together, we will have strength in all the key growth
areas. Together, we will have the financial strength, economic efficiencies and
operational effectiveness necessary to deliver greater value and more economic
solutions to our customers.
And together -- as well as with our partners -- we will be equipped to meet more
of their needs, making the combined company a more strategic, more desirable
partner.
Much has been made of the combined company's "exposure" to the PC sector. To
begin with, the merger is not about PCs. It is about growing the enterprise,
services and printing and imaging businesses. But we also see good opportunity
in the PC market. Our goal is to preserve the best parts of each PC business and
improve the economics.
Most important, we will build on the substantial strengths of both companies to
drive innovation across new access devices and categories. We believe the
combination of a more efficient business model and industry-leading invention
and innovation will make this a solid and growing business over the long term.
Preliminary economic analysis showed that synergies achieved by combining the
two companies would lead to roughly $2.5 billion of annual cost savings. Further
work will likely show that synergies may even surpass this estimate.
We did not undertake this merger lightly. And we have not focused solely on the
business case, as compelling as it is. We also examined with great care whether
this transaction serves the best interests of our employees and the communities
where we live and do business. Again, the answer is a resounding yes -- when one
considers the strategic paths available to these companies against the reality
of a changed landscape.
We do not underestimate the challenges involved in a transaction of this size.
We have prepared for them. The ability of the respective management teams to
execute despite recent distractions is one measure of their ability to effect a
smooth and rapid integration. We must change, and, since this is the best course
for both companies, we must find the right way to make it happen.
As our industry contemplates the road ahead, there are solid examples of
successful adaptation and evolution. While the goal of the new HP is not to
replicate IBM, no one can deny that that great company needed to break with some
of its past in order to be revitalized and restored to its current state of
strength. That included the freedom to make changes that were, in some respects,
inconsistent with the company's past "culture."
We intend to thrive by adapting, as IBM did. And we have the right management
team to do it.
Change will be difficult, even painful perhaps. But no one with an appreciation
of history or evolution can responsibly deny that it is necessary. We can
control our destiny and create a great enterprise of enduring value if we
embrace the right changes now. This merger is the one right choice for Compaq
and HP.
----------
RICHARD HACKBORN IS A MEMBER OF THE BOARD OF DIRECTORS OF HEWLETT-PACKARD CO.
THOMAS PERKINS IS A MEMBER OF THE BOARD OF COMPAQ COMPUTER CORP.
(C)2001 The Mercury News.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements that involve risks,
uncertainties and assumptions. If any of these risks or uncertainties
materializes or any of these assumptions proves incorrect, the results of HP
and its consolidated subsidiaries could differ materially from those
expressed or implied by such forward-looking statements. All statements other
than statements of historical fact are statements that could be deemed
forward-looking statements, including any projections of earnings, revenues,
synergies, accretion or other financial items; any statements of the plans,
strategies, and objectives of management for future operations, including the
execution of integration and restructuring plans and the anticipated timing
of filings, approvals and closings relating to the Compaq transaction or
other planned acquisitions; any statements concerning proposed new products,
services, developments or industry rankings; any statements regarding future
economic conditions or performance; any statements of belief and any
statements of assumptions underlying any of the foregoing. The risks,
uncertainties and assumptions referred to above include the ability of HP to
retain and motivate key employees; the timely development, production and
acceptance of products and services and their feature sets; the challenge of
managing asset levels, including inventory; the flow of products into
third-party distribution channels; the difficulty of keeping expense growth
at modest levels while increasing revenues; the challenges of integration and
restructuring associated with the Compaq transaction or other planned
acquisitions and the challenges of achieving anticipated synergies; the
possibility that the Compaq transaction or other planned acquisitions may not
close or that HP, Compaq or other parties to planned acquisitions may be
required to modify some aspects of the acquisition transactions in order to
obtain regulatory approvals; the assumption of maintaining revenues on a
combined company basis following the close of the Compaq transaction or other
planned acquisitions; and other risks that are described from time to time in
HP's Securities and Exchange Commission reports, including but not limited to
the annual report on Form 10-K for the year ended Oct. 31, 2000, and
subsequently filed reports. HP assumes no obligation and does not intend to
update these forward-looking statements.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
On November 15, 2001, HP filed a Registration Statement with the SEC
containing a preliminary joint proxy statement/prospectus regarding the
Merger. Investors and security holders of HP and Compaq are urged to read
the preliminary joint proxy statement/prospectus filed with the SEC on
November 15, 2001 and the definitive joint proxy statement/prospectus when it
becomes available and any other relevant materials filed by HP or Compaq with
the SEC because they contain, or will contain, important information about
HP, Compaq and the Merger. The definitive joint proxy statement/prospectus
will be sent to the security holders of HP and Compaq seeking their approval
of the proposed transaction. The preliminary joint proxy
statement/prospectus filed with the SEC on November 15, 2001, the definitive
joint proxy statement/prospectus and other relevant materials (when they
become available), and any other documents filed by HP or Compaq with the
SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In
addition, investors and security holders may obtain free copies of the
documents filed with the SEC by HP by contacting HP Investor Relations, 3000
Hanover Street, Palo Alto, California 94304, 650-857-1501. Investors and
security holders may obtain free copies of the documents filed with the SEC
by Compaq by contacting Compaq Investor Relations, P.O. Box 692000, Houston,
Texas 77269-2000, 800-433-2391. Investors and security holders are urged to
read the definitive joint proxy statement/prospectus and the other relevant
materials when they become available before making any voting or investment
decision with respect to the Merger.
HP, Carleton S. Fiorina, HP's Chairman of the Board and Chief Executive
Officer, Robert P. Wayman, HP's Executive Vice President, Finance and
Administration and Chief Financial Officer, and certain of HP's other
executive officers and directors may be deemed to be participants in the
solicitation of proxies from the stockholders of HP and Compaq in favor of
the Merger. The other executive officers and directors of HP who may be
participants in the solicitation of proxies in connection with the Merger
have not been determined as of the date of this filing. A description of the
interests of Ms. Fiorina, Mr. Wayman and HP's other executive officers and
directors in HP is set forth in the proxy statement for HP's 2001 Annual
Meeting of Stockholders, which was filed with the SEC on January 25, 2001.
Investors and security holders may obtain more detailed information regarding
the direct and indirect interests of Ms. Fiorina, Mr. Wayman and HP's other
executive officers and directors in the Merger by reading the preliminary
joint proxy statement/prospectus filed with the SEC on November 15, 2001 and
the definitive joint proxy statement/prospectus when it becomes available.
Compaq and Michael D. Capellas, Compaq's Chairman and Chief Executive
Officer, and certain of Compaq's other executive officers and directors may
be deemed to be participants in the solicitation of proxies from the
stockholders of Compaq and HP in favor of the Merger. The other executive
officers and directors of Compaq who may be participants in the solicitation
of proxies in connection with the Merger have not been determined as of the
date of this filing. A description of the interests of Mr. Capellas and
Compaq's other executive officers and directors in Compaq is set forth in the
proxy statement for Compaq's 2001 Annual Meeting of Stockholders, which was
filed with the SEC on March 12, 2001. Investors and security holders may
obtain more detailed information regarding the direct and indirect interests
of Mr. Capellas and Compaq's other executive officers and directors in the
Merger by reading the preliminary joint proxy statement/prospectus filed with
the SEC on November 15, 2001 and the definitive joint proxy
statement/prospectus when it becomes available.
* * * * *